If you are still putzing around with your taxes, it’s probably because you don’t have the funds to pay your obligation- and you’re stretching your imagination to come up with deductions. Sorry-you don’t have a TV show, so that $ 70K for Self-Styling Adorn to keep your one strand of hair curled about your head is not going to be a viable deduction.
Tag Archives: Form 9465
Second Chances?
You want to tick off the IRS?
Don’t pay your tax bill.
That’s really the easiest way to get the wrath of this massive government agency to be directed upon you.
And the fees go up…
Many of my clients find themselves in deep trouble around 15 April. They have badly miscalculated (maybe I should use the word ‘misconstrued’) how much they will have to pay the IRS.
Pay the Piper…
You know you owe taxes. And, because you don’t have the money you are considering NOT FILING. That is about the dumbest response to your predicament.
It’s not the ides of April this year
Well, if you own a business (C corporation, S corporation, LLC operating as an S), then your corporate tax return should already have been filed. The rest of you have until the 17th of April (only this year) to file. And, there are two new IRS provisions that may make your file submission a little easier. Many of you do not understand that an unincorporated business have a hidden provision that causes you to have a big tax bill. It’s easier to explain this with a simple example. Paul Naïve has a wife and two kids. Paul runs a business that grossed $ 50K and had expenses of $ 30K, leaving him with $ 20K profit. His wife works for SmallCo, making $20K, and claims 0 dependents on her paycheck. (Paul and his wife are sure that this choice, which takes out the most taxes, will save them from a big IRS bill at the end of the year.) They know that, given the income taxes on $ 40K of income, with their four dependents , her withholding tax will cover their entire income tax. The answer is that’s correct- but the wrong consideration. You see, Paul is self-employed, and his $ 20K of net profit is also subject to social security and medicare taxes- to the tune of almost $ 2500. Meaning that the Naïve’s will still owe about $ 2500 in taxes to the IRS. And, they don’t have it. (Paul should have come to us in January and September- at the least- to help him with his tax planning, and maybe even make some changes in his operations to keep more of his money- but that’s NOT the topic of this discussion, today.) The worst thing the Naïve’s can do (and many do it) is to NOT file taxes, because they owe money. That means they will owe penalties and interest. A failure-to-file penalty (5% of the unpaid taxes each month your filing is late, up to 25% of the total unpaid taxes due) and a failure-to-pay penalty of ½ % monthly (also up to 25%).